§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his estimate of the annual cumulative savings to the Exchequer which would result from lower debt interest costs if United Kingdom interest rates were(a) 0.5 per cent., (b) 0.75 per cent., (c) 1 per cent. and (d) 1.5 per cent. lower across the yield curve for (1) 1997–98, (2) 1998–99, (3) 1999–2000, (4) 2000–01 and (5) 2001–02. [12784]
§ Mr. Waldegrave[holding answer 27 January 1997]: Estimated reductions in central Government net debt interest payments resulting from lower interest rates are presented in the table.
£ billion Savings made from stated reduction in interst rates 0.5 per cent. 0.75 per cent. 1.0 per cent. 1.5 per cent. 1997–98 0.3 0.5 0.6 0.9 1998–99 0.5 0.7 0.9 1.4 1999–00 0.6 0.9 1.2 1.7 2000–01 0.7 1.0 1.3 2.0 2001–02 0.7 1.0 1.3 2.0 These estimates show the total reduction in debt interest payments for a given year which might be expected from a reduction in interest rates of the magnitude shown. They assume the fall in interest rates is sustained throughout the forecast period.
Such estimates are dependent on the assumed path of Government borrowing. These figures are calculated using the Budget 1996 borrowing forecast.